Another setback for the Executive: the Budget Committee returns the MEF Proposal... we analyze the options of both groups

PANAMA - In Brief 23 Oct 2024 by Marco Fernandez
The 2025 budget project, approved by the cabinet on October 15 and presented the same day to the Assembly, was returned (not rejected) after the first debate in the Legislative Assembly. The 15 members of the budget committee requested the Minister of Economy and Finance to modify his proposal to include, among other things, certain items that had been reduced in the MEF proposal: - Increase the contribution to education (7% of GDP instead of 5.5%). - Restore subsidies for preferential interest rates on housing loans between $120,000 and $180,000 and the $10,000 bonus for builders of low-income housing priced under $70,000. - Guarantee all the requested funds to universities (including the controversial University of Chiriquí - UNACHI, a source of corruption but a political arm of the PRD, a key political party in the Legislative). - Ensure no cuts to the transfers to municipalities from the national property tax, which have been a source of corruption in what has been called "parallel decentralization" without effective control, but the only important source of investment resources for the country's municipalities. In short, they demanded a plan far from the spending contraction design proposed by the Cabinet Council. Of the 15 members of the Commission, 5 are from the PRD (a party that only received less than 7% of the vote in the May election but has populist strength in the Assembly); 5 are from the independent group Vamos; 2 are from the Panameñista Party; and only 3 directly answer to President Mulino. The complaint from Vamos (with 21 votes in the 71-member Assembly) can be interpreted as concern over the allocation of funds to municipalities, where the party ha...

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